HDFC Bank Q3: PAT may grow up to 20% YoY; margin, asset quality seen steady


Q3 preview: HDFC Bank, India’s largest private sector lender, is projected to report a steady earnings growth during the October-December quarter of the current financial year (Q3FY23), as loan growth moderated sequentially.

According to consensus estimates by Bloomberg, may see around 14 per cent year-on-year (YoY)/11.6 per cent quarter-on-quarter (QoQ) growth in net profit at Rs 11,833 crore. NII increase, meanwhile, is seen at 16 per cent YoY/8 per cent QoQ at Rs 30,822 crore.

The lender is scheduled to report its on Saturday, January 14.

ALSO READ: HDFC Bank’s loan book expands by 19.5%, domestic retail loans grow 21.5%

In its Q3 business update, said loan growth stood at 1.8 per cent quarter-on-quarter (QoQ), owing to moderation in wholesale loans. Retail/commercial loans were strong and grew 5 per cent QoQ. On a YoY basis, overall loan growth slowed down to 19.5 per cent compared with 23.5 per cent growth in Q2FY23.

Deposit growth, however, improved to 20 per cent year-on-year (YoY) as against the September quarter’s growth of 19 per cent. On a sequential basis, deposit growth was around 4 per cent.

That said, management commentary around deposit mobilisation, conversation on regulatory dispensations, outlook on margin trajectory, asset quality in Agri/Unsecured book, and commentary around credit cards, traction in fee income, and the merger with HDFC will be the key monitorables.

ALSO READ: SBI, ICICI, HDFC Bank continue to be systemically important banks

Here’s what key brokerages expect from HDFC Bank’s Q3FY23 results:


The brokerage expects net income of the bank to grow 12.3 per cent YoY to Rs 11,619 crore owing to higher net interest income (NII) and fee income.

Pre-provision operating profit (PPOP) may increase 11 per cent YoY and 7 per cent QoQ to Rs 18,595 crore. The same was Rs 16,776 crore in Q3FY22, and Rs 17,392 crore in Q2FY23.

The brokerage also expects net interest margin (NIM) to have benefitted QoQ due to lending rate hikes, and pegs it at 4.19 per cent vs 4.10 per cent last quarter.

It forecasts slippages to increase to 1.97 per cent with credit cost around 86 basis points.

ALSO READ: Pvt banks to report healthy earnings in Q3, aided by robust credit growth

Morgan Stanley

It expects core revenue growth to improve by 20 per cent YoY to Rs 22,240 crore, as against Q3FY22’s NII of Rs 18,440 crore, driven by balance sheet growth and sequential margin expansion.

Margin expansion of 5bps QoQ to 4.15 per cent will be led by repricing of book as well as loan mix shift towards higher margin loans. It expects cost growth to remain elevated at 21 per cent YoY as retail business accelerates, and investment in branch network expansion picks up pace.

Consequently, core PPOP growth is pegged at 19 per cent YoY at Rs 16,280 crore.

Asset quality trends, the brokerage said, will remain strong, with credit cost seen at 65bps.

Overall, net profit growth is seen at 19 per cent YoY at Rs 12,285.2 crore. In Q2FY23, net profit was Rs 10,606 crore, while it was Rs 10,342 crore in Q3FY22.

ALSO READ: Indian banks going through a purple patch: NPAs trending downwards


The brokerage has pegged NII growth at 22.6 per cent YoY/7.6 per cent QoQ at Rs 22,612 crore. Operating profit and net profit, meanwhile, are anticipated to rise 13 per cent/16 per cent YoY to Rs 18,996 crore and Rs 12,007 crore, respectively.

Prabhudas Lilladher

In-line with consensus estimates, it expects a NII growth of 20.3 per cent YoY/5.6 per cent QoQ at Rs 22,193.4 crore, led by decent loan growth of 19.5 per cent YoY, while margin would see improvement led by loan mix changes.

The bank, it said, may continue to build in buffer provisions which would lead to steady earnings.

Provisions are seen rising 13.6 per cent YoY/5 per cent QoQ at Rs 3,400 crore vs Rs 2,994 crore YoY and Rs 3,240.1 crore QoQ.

Net profit growth, however, is pegged lower at 6.7 per cent YoY to Rs 11,038.7 crore.

Motilal Oswal Financial Services

The brokerage sees steady asset quality for the bank with gross non-performing assets (GNPA) at 1.2 per cent, and NNPA at 0.3 per cent.


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